Shares in Europe Tumble Over 2% on Delta Strain Jitters
European stocks decline 2% or more as investors offload risk on increased virus woes. US equities also turn lower as Delta variant threatens to slow down economic growth.
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- European stocks decline 2% or more as investors offload risk on increased virus woes
- US equities also turn lower as Delta variant threatens to slow down economic growth
European markets were heavily pressured on Monday and sank more than 2% in what became their worst session in nine months. The fast-growing spread of the Delta coronavirus variant is threatening to undermine the global economic recovery as cases are climbing daily in Europe and the US.
Real-economy stocks were among the biggest losers in the European session yesterday as investors feared the reopening could be reversed if virus infections spiraled out of control. Commodity-related stocks, travel-and-leisure shares, and banking stocks erased more than 3%.
The pan-continental Stoxx 600 Europe declined 10.45 points, or 2.30%, to 444.29 as all sectors in the broad-based index ended the session in negative territory. Major nationwide indexes were all down 2% or more. UK’s FTSE100 dropped 2.34%, while Germany’s DAX tumbled 2.62%. France’s CAC40 tanked 2.54% and the Spanish IBEX35 slipped 2.40%.
The European market sell-off was largely driven by a rapid increase in Covid-19 cases globally. Rising infections overshadowed the rosier outlook for many developed economies, including the UK, which is becoming a virus hotspot. In Britain, cases have been steadily floating around 50,000 a day in recent days.
In France, the nation took to the streets to protest against the government’s latest measures to push people to get vaccinated. As much as 100,000 people demonstrated their reluctance to follow the government’s decision to make vaccines compulsory for all health care workers, and to require a “health pass”, proof of vaccination, a recent negative test, or proof of recovery from the virus, to access restaurants and other public venues.
Governments across Europe are warning that the continued spread of the Delta variant could put pressure on hospitals. To prevent another health care crisis, authorities urge the unvaccinated to get their vaccine shots as soon as possible.
Stocks Affected by Virus Concerns
Meanwhile, in the US, Wall Street stocks suffered a heavy blow on Monday as virus fears spread quickly. An aggressive 2% sell-off extended the losses from last week when major indexes snapped a three-week winning stretch.
Inflation fears weighed further on companies in the US after consumer-price data for June showed prices spiked 5.4% on a 12-month basis. The three main US stock gauges ended the day sharply in the red with the Dow leading the losses. The 30-stock blue-chip index declined 2.09%. At one point, the index floated as much as 1,000 points in negative territory. The S&P500 and the Nasdaq Composite lost 1.59%, and 1.06%, respectively.
Tuesday’s futures trading showed major averages attempted to bounce back from their steep losses. Dow Jones futures indicated a higher open by about 200 points in overnight trading. Premarket gains remain elevated as market participants will aim to pare some of yesterday’s losses.
In cryptocurrency markets, bitcoin and alternative coins took a hit on Monday. The leading crypto-asset managed to contain a loss below 3%. Today, however, digital currency has slipped further to the downside. Bitcoin’s price tumbled another 4% on Tuesday as it slid under the $30,000 mark. Bitcoin is now barely in profit for the year as it hovers just about 1% in the green year-to-date. The flagship token is now trading at around $29,600 per coin.
Gold, on the other hand, is trading in positive territory for a second straight day. The precious metal has climbed to $1,817 per ounce after it erased a Monday slide to $1,795.